Smoking during pregnancy is the leading preventable cause of poor pregnancy outcomes in the U.S. Most pregnant smokers continue smoking through pregnancy producing serious immediate and longer-term adverse health consequences for the infant. Smoking during pregnancy is highly associated with economic disadvantage and a substantive contributor to health disparities. Efficacious interventions are available but cessation rates are low (<20 percent) and improvements in birth outcomes often modest or absent. Current treatments usually entail relatively brief, low-cost interventions (e.g. pregnancy-specific quit lines). There is broad consensus that more effective interventions are sorely needed. We have developed a novel behavioral-economic intervention in which women earn financial incentives contingent on smoking abstinence. In a meta-analysis of treatments for smoking during pregnancy, effect sizes achieved with financial incentives were several-fold larger than those achieved with lower-intensity approaches or medications. The intervention also appears to improve birth outcomes and increase breastfeeding duration. While highly promising, further research is needed in at least three areas. (1) The evidence on birth outcomes and breastfeeding is from studies that combined data across trials rather than a single prospective trial, (2) whether the intervention produces other postpartum improvements in health has not been investigated, and (3) the overall cost-effectiveness of this approach has not been examined. To examine these unanswered questions, we are proposing a randomized, controlled clinical trial comparing the efficacy and cost effectiveness throuh one-year postpartum of current best practices for smoking-cessation during pregnancy vs. best practices plus financial incentives among 230 pregnant, Medicaid recipients. We will also include a third condition of 115 pregnant non-smokers matched to the smokers on socio-demographic and health conditions to compare the extent to which the treatments reduce the burden of smoking and to estimate how much more might be accomplished by further improvements in this incentives intervention without exceeding cost-effectiveness. We hypothesize that best practices plus financial incentives will be more effective than best practices alone, that the incentives intervention will be cost effective, and that while adding the incentives reduces a greater proportion of the health and economic burden of smoking than best practices alone, more can be done while remaining cost effective. Overall, the proposed study has the potential to substantially advance knowledge on cost-effective smoking cessation for pregnant women. Importantly, because of the strong association between smoking during pregnancy and economic disadvantage, the proposed study also has the potential to contribute new knowledge relevant to reducing the serious challenges of health disparities.